Por que favorecer firmas nacionais?

Abstract

This paper investigates thes for a effects of the existence of preferences for domestic firms in government procurement. When the domestic firm's probability of completion of a government contract is larger than the foreign firm's, the government should favor domestic firms in order to maximize the expected net benefit of the project. The paper establishes both firms' equilibrium strategie lowest-offer procurement auction, and it calculates the level of preferences that maximizes the government's net expected benefit under different parameter values.